You have to have the engine hoses connected correctly as well. Here is what I finally figured out.
The nipple on the water pump is the low pressure heater hose and needs to go directly to the heater core. The nipple on the block is the Hi-pressure heater hose and goes to the heater control valve.
One comment said that you want it this way so that the heater core isn't seeing the dead headed higher pump outlet pressure when the valve is closed.
You need to see how the tunnel pipes are connected to the block and water pump as well as how they connect to the heater core and valve.
I did a lot of searches on the forums including Mustang and other forums before concluding that this information is probably correct.
Norm